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BOJ Stimulus Not Soon

Will the Bank of Japan come to Shinzo Abe’s rescue yet again? Despite the latest disappointing news on Japan’s economic front, don’t count on it, FX Analysis reported. Recently, the Japanese Statistics Office released CPI figures for August, and headline inflation fell to -0.1%. Now, while the BOJ’s “target” inflation rate is 2%, the central bank anticipates that inflation will recover and head higher. Though the evidence seemingly suggests otherwise. Well, there are a number of reasons. First, with the exclusion of specific volatile components, inflation actually jumped 0.6% YoY. Second, by breaking the inflation rate down into segments it becomes clear that the majority have seen an increase in prices. Third, because Governor Kuroda wants to hold the prime minister’s feet to the fire. In other words, he wants Shinzo Abe to deliver on the other two of his oft-uttered promises of “three arrows of growth.” Thus far, the only arrow “released” has been the one shot by the BOJ via Quantitative Easing.